While Open Banking and Open Finance are still at their early stages in Southeast Asia (SEA), we are observing promising initiatives from regulators, digital banks, Open Finance enablers, and fintech companies. As a result, end users, both retail and SMEs, are benefiting. They can open bank accounts digitally from their e-wallet apps. Some countries enabled unified interoperable instant payment networks such that users can easily make digital payments and send money across bank accounts and e-wallets. User-consented financial data sharing is also becoming popular for retail and SME credit scoring.
Being amongst the first companies to spearhead Open Finance solutions across multiple markets in Southeast Asia, Brankas takes a three-pronged approach to the proliferation of the initiative:
Enterprise solutions: Brankas’ proprietary enterprise products like middleware solutions (Open Finance Suite), white labelled internet payment gateway (Merchant Link), and cloud-native modular core banking systems (Open Core) enable FIs to publish their services via APIs in months. These solutions are currently being used by some of the biggest FIs in the region.
Regionwide coverage: Brankas is the only truly regional Open Finance player with deep market coverage in markets like Indonesia and the Philippines for API aggregation. On the other hand, Brankas’ enterprise solutions are market agnostic and can be easily customisable to comply with regulatory requirements and can be deployed on cloud, on-premise, or hybrid installation.
Product spectrum: While most players in the region specialise in one area of the Open Finance stack, Brankas is the only player in the region serving all three major use cases: account information, payment initiation, and origination of financial instruments.
According to a Bain, Temasek, and Google report, 6 out of 10 people in SEA are unbanked/underbanked. The majoritary SEA population lives outside major cities, often on remote islands, with limited-to-no access to physical bank branches. Given the number of islands, making bank branches truly digital and accessible from any online channel through third party apps aligns with our vision to 'bank the unbanked’. Most countries also lack centralised credit bureaus, thus it becomes very difficult for them to access financial services from institutions. Businesses and people have moved online thanks to greater internet penetration and availability of affordable smartphones. Open Finance can help bring this segment under an institutionalised umbrella. Banks can enable fully online account opening via in-house and third party channels. E-wallets, ecommerce platforms, and super apps, which arguably have greater penetration, can be a rich source of alternate data that can be used for credit scoring for individuals and SMEs, thus enabling further access to financial products and services.
Banks can consider publishing APIs or building their Banking-as-a-Service suite for payment, disbursement, financial data retrieval and origination (account opening, loans etc.) use cases. These APIs can be consumed by authorised third party platforms and distributed at scale to the end users, even the ones residing in remote locations.
Similarly, fintechs, such as e-wallets, payment gateways, etc., can consider publishing APIs for authentication and data sharing. FIs can take advantage of the KYC information from fintechs when onboarding new customers, or use data from fintechs for alternative credit scoring.
Banks can consider adopting/building modern loan management and origination systems, taking advantage of the rich sources of alternative data mentioned above, and the instant disbursement and repayment channels.
Needless to say, these use cases can greatly reduce the customer acquisition costs for both banks and fintechs, open up new revenue opportunities, and build customer stickiness. Thus, Open Finance can have a direct positive impact on the banks’ and fintechs’ revenue.
With the onset of the pandemic and post-pandemic, digital banks and some incumbent banks have doubled down in building, either in-house or in collaboration with enablers like Brankas, digital products and services, and building API banking suites to partner with third party distributors.
With the majority of the population unbanked/underbanked, banks and non-bank financial institutions are increasingly using alternative data (e-wallet transaction data, ecommerce purchase behaviour, etc.) for making better credit decisions and widening their customer base.
In addition, more and more organisations are offering financial services within their platforms, like BNPL, credit card applications etc. (embedded finance) either by directly partnering with banks offering Banking-as-a-Service or Open Finance aggregators like Brankas.
There are two main challenges in the market today - Digital infrastructure and regulatory maturity. On digital infrastructure, the majority of banks are not at the point to serve open APIs to their customers. This is usually blocked because of:
Capability – many banks do not have the inhouse staff to create a self-automated onboarding platform that works in the favour of their customers
Regulatory – many banks (especially larger) are waiting for open banking regulations to be implemented before taking action
Commercial – Banks do not always see immediately the commercial benefits of onboarding merchants to access A2A transfers, statement and identity data, or even more mature financial instruments that can be deployed digitally
Education – Retail customers and SMEs are not always savvy or comfortable with consent based financial data sharing, account linking with third parties, opening bank account on a third party platform etc.
Fintech companies are able to perform most API-based services via RPA based methods – This does not require a large financial institution to create APIs, which leads to disruption within the industry.
Forward thinking governments that enable RPA-based solutions.
PCI-DSS for the intents of utilising our Visa data products – This means that our customers are able to use Visa data products without having to obtain their own PCI-DSS certification.
PJP (Indonesia) so that our customers don’t have to pursue this themselves.
ISO27001 certification ensuring optimum security for Brankas products.
We offer SDKs to gain access to our A2A payment and data products through our proprietary Identity Provider.
We provide a dashboard that allows customers to utilise our products with low/no code - e.g. a customer can sign up to our dashboard today, create a URL that they can send to an end user in order to facilitate obtaining access to bank statement data from that end user.
We provide a MSME solution that allows smaller businesses to start taking payments through bank transfers directly into their bank account – no code needed.
This article has first been published in the Open Banking Report 2022. Click here to download the report.
Anik is currently leading regional business development and partnership for Brankas. Prior to Brankas, Anik cofounded a venture funded gaming startup out of startup incubator Antler. Anik holds a Bachelor of Engineering (Biomedical) degree from the National University of Singapore.
Brankas is the leading Open Finance technology provider in Southeast Asia. We provide API-based solutions, data, and payments solutions for financial service providers. With Brankas’ secure Open Banking technology, online businesses, fintech companies and digital banks can use Brankas APIs to create new digital experiences for their users.
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